January 3, 2018
The Department of Justice collected $2.4 billion in fraud and false claims settlements and judgments in fiscal year 2017, marking the eighth consecutive year recoveries in the healthcare sector exceeded $2 billion.
Nearly half of the recoveries—more than $900 million—came from the drug and medical device industry. The most notable involved Shire Pharmaceuticals’ case, which alleged that the Lexington, MA-based company and one of its subsidiaries paid kickbacks and used other illegal means to compel physicians and clinics to use or overuse its bioengineered human skin substitute, Dermagraft. The case was resolved with a $350 million settlement, which represents the largest False Claims Act recovery by the federal government in a kickback case involving a medical device.
The DOJ also obtained significant recoveries from healthcare providers. Life Care Centers of America, based in Cleveland, TN, paid out $145 million to settle allegations it forced skilled nursing facilities to submit fraudulent claims to Medicare for unnecessary rehab services.
In 2017, the DOJ continued to hold physicians and healthcare executives personally responsible for fraud. For example, several urologists were charged with referring unnecessary tests to Fort Myers, FL-based 21st Century Oncology. These settlements were in addition to the $19.75 million that 21st Century Oncology paid in 2015 for violating the False Claims Act.
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